Category: General Knowledge | Last updated: 2026-09-18

A company has invested millions in a failing project. Despite clear evidence that the project will not be profitable, the CEO decides to inject even more funds, arguing, "We've already put so much into this; we can't give up now." Which cognitive bias is influencing the CEO's decision?

A) Groupthink

B) Hindsight Bias

C) Sunk Cost Fallacy

D) Endowment Effect

Explanation

The Sunk Cost Fallacy is the tendency to continue investing in a failing endeavor because of the time, money, or effort already expended, rather than making a rational decision based on future costs and benefits.

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